This document discusses strategic analysis and choice frameworks. It introduces concepts to help strategists generate alternatives, evaluate them, and choose a course of action. It describes the nature of strategy analysis and choice, including establishing objectives, generating alternatives, and selecting strategies. Analytical frameworks covered include the internal-external factor matrices, SWOT analysis, BCG matrix, and matching key internal and external factors to formulate alternative strategies. Limitations of the SWOT matrix are also noted. The overall purpose is to provide strategists with tools and concepts to aid in strategic decision making.

1. RAMIL P. POLINTAN
Head, Mathematics
Department, TNHS

2. Strategy Analysis & Choice


Strategic analysis and choice largely involve
making subjective decisions based on objective
information.
This report introduces important concepts that
can help strategists generate feasible
alternatives, evaluate those alternatives, and
choose a specific course of action. Behavioral
aspects of strategy formulation are
described, including politics, culture, ethics, and
social responsibility considerations.

3. Nature of Strategy Analysis & Choice

-- Establishing long-term objectives
-- Generating alternative strategies
-- Selecting strategies to pursue
-- Best alternative - achieve mission &
objectives

4. Strategy Analysis & Choice
Alternative Strategies Derive From --
Vision
Mission
Objectives
External audit
Internal audit
Past successful strategies

6. Comprehensive Strategy-Formulation
Framework
Stage 1:
The Input Stage
Stage 2: Stage 3:
The Matching Stage The Decision Stage

7. Strategy-Formulation Analytical
Framework
Internal Factor Evaluation
Matrix (IFE)
Stage 1: Competitive Profile Matrix
The Input Stage (CPM)
External Factor Evaluation
Matrix (EFE)

8. Stage 1: The Input Stage
Basic input information for the matching &
decision stage matrices
Requires strategists to quantify subjectivity early
in the process
Good intuitive judgment always needed

9. Strategy-Formulation Analytical
Framework SWOT Matrix
Stage 2: BCG Matrix
The Matching Stage
Grand Strategy Matrix

10. Stage 2: The Matching Stage
Match between organization’s internal resources &
skills and the opportunities & risks created by its
external factors
E.g. internal: strong R and D function
External changing demographics (population
getting older)
Strategy: Develop new products for older
adults (related to long term objectives financial or
strategic)

11. Stage 2: The Matching Stage: SWOT Matrix
Four Types of Strategies
Strengths-Opportunities (SO):
Use a firm’s internal strengths to take advantage of
external opportunities
Weaknesses-Opportunities (WO):
Improving internal weaknesses by taking advantage
of external opportunities
Strengths-Threats (ST):
Use a firm’s strengths to avoid or reduce the impact of
external threats.
Weaknesses-Threats (WT):
Defensive tactics aimed at reducing internal weaknesses
and avoiding external threats

12. SWOT Matrix
Strengths – S Weaknesses – W
List Strengths List Weaknesses
Opportunities – O SO Strategies WO Strategies
Use strengths to take Overcoming
List Opportunities advantage of weaknesses by taking
opportunities advantage of
opportunities
Threats – T ST Strategies WT Strategies
Use strengths to avoid Minimize weaknesses
List Threats threats and avoid threats

13. Matching Key Factors to Formulate Alternative Strategies
Key Internal Factor Key External Factor Resultant Strategy
20% annual growth
Excess working
+
in the cell phone
=
Acquire
capacity (strength) industry Cellfone, Inc.
(opportunity)
Exit of two major
Pursue horizontal
Insufficient capacity foreign competitors
+ = integration by buying
(weakness) from the industry
(opportunity) competitor's facilities
Decreasing numbers
Develop new products
Strong R&D (strength) + of young adults =
(threat) for older adults
Develop a new
Poor employee morale Strong union
+
activity (threat)
= employee benefits
(weakness)
package
Which types of strategies, e.g. intensive diversification…, are referred to above 13

14. Strengths: Weaknesses:
1. Over dependent on borrowings -
1. R and D almost complete Insufficient cash resources
2. Basis for strong management team 2. Board of Directors is too narrow
3. Key first major customer acquired 3. Lack of awareness amongst prospective
4. Initial product can evolve into range of customers
offerings 4. Need to relocate to larger premises
5. Located near a major centre of 5. Absence of strong sales/marketing
excellence expertise
6. Very focused management/staff 6. Overdependence on few key staff
7. Well-rounded and managed business 7. Emerging new technologies may move
market in new directions
Threats: Opportunities:
1. Major player may enter targeted market
segment 1. Market segment is poised for rapid
2. New technology may make products growth
obsolescent 2. Export markets offer great potential
3. Economic slowdown could reduce 3. Distribution channels seeking new
demand products
4. Euro/Yen may move against $ 4. Scope to diversify into related market
5. Market may become price sensitive segments
6. Market segment's growth could attract
major competition

15. Key Strategies
1.
 by strengthening R and D
Accelerate product launches
team
2. Extend links with key technology centres
3. Raise additional venture capital
4. Expand senior management team in sales/marketing
5. Recruit non-executive directors
6. Strengthen human resources function and introduce
share options for staff
7. Appoint advisers for intellectual property and finance
8. Seek new market segments/applications for products

16. SWOT Matrix
Strengths – S Weaknesses – W
List Strengths List Weaknesses
Opportunities – O SO Strategies WO Strategies
Match and determine Match and determine
List Opportunities strategy strategy
Threats – T ST Strategies WT Strategies
Match and determine Match and determine
List Threats strategy strategy
Inset key strategies into correct box element of the Matrix

17. Limitations with SWOT Matrix

Does not show how to achieve a competitive
advantage
Provides a static assessment in time
May lead the firm to overemphasize a single
internal or external factor in formulating
strategies

18. BCG Matrix
Boston Consulting Group Matrix
Enhances multi-divisional firm in formulating
strategies
Autonomous divisions = business portfolio
Divisions may compete in different industries
Focus on market-share position & industry
growth rate

19. BCG Matrix
Relative Market Share Position
Ratio of a division’s own market share
in an industry to the market share held
by the largest rival firm in that industry

20. BCG Matrix
Relative Market Share Position
High Medium Low
1.0 .50 0.0
High
+20

Stars Question Marks
Industry Sales Growth Rate
II I
Medium
0
Cash Cows Dogs
III IV
Low
-20
20

21. BCG Matrix
Question Marks
Low relative market share – compete in high-
growth industry
Cash needs are high
Case generation is low
Decision to strengthen (intensive strategies) or
divest

22. BCG Matrix
Stars
High relative market share and high growth
rate
Best long-run opportunities for growth &
profitability
Substantial investment to maintain or
strengthen dominant position
Integration strategies, intensive strategies, joint
ventures

23. BCG Matrix
Cash Cows
High relative market share, competes in low-
growth industry
Generate cash in excess of their needs
Milked for other purposes
Maintain strong position as long as possible
Product development, concentric diversification
If weakens—retrenchment or divestiture

24. BCG Matrix
Dogs
Low relative market share & compete in slow
or no market growth
Weak internal & external position
Liquidation, divestiture, retrenchment

25. Grand Strategy Matrix
Tool for formulating alternative strategies
Based on two dimensions
Competitive position
Market growth

26. RAPID MARKET GROWTH
Quadrant II Quadrant I
1. Market development 1. Market development
2.
3.
Market penetration
Product development

2.
3.
Market penetration
Product development
4. Horizontal integration 4. Forward integration
5. Divestiture 5. Backward integration
6. Liquidation 6. Horizontal integration
WEAK 7. Concentric diversification STRONG
COMPETITIVE COMPETITIVE
POSITION Quadrant III Quadrant IV
POSITION
1. Retrenchment 1. Concentric diversification
2. Concentric diversification 2. Horizontal diversification
3. Horizontal diversification 3. Conglomerate
4. Conglomerate diversification
diversification 4. Joint ventures
5. Liquidation
26
SLOW MARKET GROWTH

27. Grand Strategy Matrix
Quadrant I
Excellent strategic position
Concentration on current markets/products
Take risks aggressively when necessary
Which type of strategy would you suggest?

28. Grand Strategy Matrix
Quadrant II
Evaluate present approach
How to improve competitiveness
Rapid market growth requires intensive
strategy

29. Grand Strategy Matrix
Quadrant III
Compete in slow-growth industries
Weak competitive position
Drastic changes quickly
Cost & asset reduction (retrenchment)

30. Grand Strategy Matrix
Quadrant IV
Strong competitive position
Slow-growth industry
Diversification to more promising growth
areas

31. Strategy-Formulation Analytical
Framework
Quantitative Strategic
Stage 3: Planning Matrix
The Decision Stage (QSPM)
Technique designed to determine the relative
attractiveness of feasible alternative actions

32. Steps to Develop a QSPM
1. Make a list of the firm’s key external

opportunities/threats and internal
strengths/weaknesses in the left column
2. Assign weights to each key external and
internal factor
3. Examine the Stage 2 (matching) matrices, and
identify alternative strategies that the
organization should consider implementing
4. Determine the Attractiveness Scores (A.S)
5. Compute the Total Attractiveness Scores
6. Compute the Sum Total Attractiveness Score

33. QSPM : information from
IFE and EFE
Strategic Alternatives
Key External Factors Weight Strategy 1 Strategy 2 Strategy 3
Economy
Political/Legal/Government
al
Social/Cultural/Demographi

c/Environmental
Technological
Competitive
Key Internal Factors
Management
Marketing
Finance/Accounting
Production/Operations
Research and Development
Computer Information
Systems
Sum total A.S.
33
AS 1 to 4 and blank if factor does not effect strategy: TAS = Weight x AS

34. QSPM
Limitations
Requires intuitive judgments & educated
assumptions
Only as good as the prerequisite inputs
Advantages
Sets of strategies considered simultaneously or
sequentially
Integration of pertinent external & internal factors in
the decision making process

35. CULTURAL ASPECTS OF STRATEGIC CHOICE
A. Culture includes the set of shared
values, beliefs, attitudes, customs, norms, personalities, h
eroes, and heroines that describe a firm.

B. All Organizations Have a Culture
1.It is beneficial to view strategic management from a
cultural perspective because success often rests on the degree
of support that strategies receive from a firm’s culture.
2.If a firm’s strategies are supported by cultural products
such as
values, beliefs, rites, rituals, ceremonies, stories, symbols, lan
guage, heroes, and heroines then managers often can
implement changes swiftly and easily.
3.Strategies that require fewer cultural changes may be
more attractive because extensive changes can take

36. THE POLITICS OF STRATEGY CHOICE
A. In the absence of objective analyses, strategy decisions

too often are based on the politics of the moment. With
development of improved strategy-formulation
tools, political factors become less important in making
strategic decisions.
B. Tactics to aid in strategy:
1. Equifinality
2. Satisfying
3. Generalization
4. Focus on Higher-Order Issues
5. Provide Political Access on Important Issues

37. THE ROLE OF A BOARD OF DIRECTORS

A director is one of a group of persons
entrusted with the overall direction of a
corporate enterprise. A board of directors is
a group of persons elected by the
ownership of a corporation to have
oversight and guidance over management
and to look out for the shareholders’
interests.

40. SWOT Analysis

SWOT Analysis is an effective way of
identifying the strengths and weaknesses of the
impact of legislation, policy, protocols, parent-
partnership arrangements, and so on, and of
examining the opportunities and threats your
organisation/school may face as a result of
implementing such policies, protocols, and
arrangements.

41. 
 Attributes of the school that are likely to
Strength have a positive effect on achieving the
school’s objectives.
 Attributes of the school that are likely to
Weaknesses have a positive effect on achieving the
school’s objectives.
 : Conditions external to the school that
Opportunities are likely to have a positive effect on
achieving the school’s objectives.
 Conditions external to the school that are
Threats likely to have a negative effect on
achieving the school’s objectives.

42. Purpose

In sum, the purpose of a SWOT analysis is
to develop strategies that capitalise on the
school’s strengths, minimise the effects of
any weaknesses, exploit available
opportunities and defend against threats.
Implementing these strategies should lead
to achieving the school’s objectives.

43. How to use the tool ?

To carry out a SWOT Analysis, write down
answers to the following questions. Where
appropriate, use similar questions and,
whenever possible, consider your answers
from your own point of view and from the
point of view of the people you deal with.

44. Strength

1. What advantages does this
policy/protocol/arrangement/other
present?
2. What do we currently do well?
3. What relevant resources do we access to?
4. What do other people see as your
strengths?

45. Weaknesses

1. What can we improve?
2. What do we not do well? Consider what you
are criticised for or what you receive
complaints about.
3. Where are we vulnerable?
 Remember to consider this from an internal and external
perspective. Do other people perceive weaknesses that
you do not see? Are other schools doing any better than
you in this area? It is best to be realistic now, and face any
unpleasant truths as soon as possible.

46. Opportunities

1. What opportunities do we know about but have
not addressed?
2. Are there emerging trends on which we can
capitalise?
 Useful opportunities can come from such things as:
1. changes in technology and educational markets on both a
broad and narrow scale
2. changes in government policy related to your field
3. changes in social patterns, population profiles, lifestyle
changes, and so on
4. local events

47. Opportunities

A useful approach to considering
opportunities is to look at your strengths
and ask yourself whether these open up
any opportunities. Alternatively, examine
your weaknesses and ask yourself whether
you could open up opportunities by
eliminating them.

48. Threats
1.

What obstacles do we face?
2. Are economic conditions affecting our financial
viability? Ask yourself, what would be the
financial, social, educational impact of not
implementing changes?
3. Are the required specifications for our services
changing?
4. Is changing technology threatening our position?
5. Could any of our weaknesses seriously threaten our
business, children’s educational attainment, and so on?
In other words, are weaknesses likely to make us
critically vulnerable?

49. Carrying out this analysis will often be illuminating –
both in terms of pointing out what needs to be done,
and in putting what we might see as a problem into

perspective. You can then use a simple matrix such
as the one below to record your analysis.
STRENGTH WEAKNESSES
OPPORTUNITIES THREATS

50. We will use an example of a teacher working within a local
primary school who is keen to review and improve
relationships with parents.
TASK 
1. Consider what practices you currently have in place to
encourage parent-partnerships within your school.
2. Use this to conduct a SWOT analysis, identifying your
current strengths and realistically appraising your current
weaknesses.
3. Then suggest up to three opportunities for improving your
current systems and, for each, list a possible threat that
would need to be managed if you were to pursue each
opportunity.

51. The Special Educational Needs Co-ordinator
(SENCO) for a local Primary School identified the
following school objective:

To improve parent-partnership by
encouraging parents to visit the school
and become active members of the
learning community, thereby fostering
parental confidence.

52. Currently, the school’s practice is to hold an

Open House event once each year, using this
as a means to encourage parents to visit the
school and engage with school staff. The
SENCO formulated the following SWOT
Analysis.

53. STRENGTHS WEAKNESSES
1. Highly-skilled, committed and 1. Teachers not available to meet
concerned teachers. parents often enough.
2. History of successful Open House 2. Insufficient school staff to plan more

events. frequent Open House events.
3. School has a strong ethos of 3. Staff not always clear of their
openness, sharing and commitment responsibilities to parent partnership
to increasing parental confidence under current legislation.
OPPORTUNITIES THREATS
1. Active volunteer group willing to 1. Confidentiality is compromised:
plan and organise Open House need to ensure proper governance of
events. voluntary organisations.
2. Pupils active in the school’s Pupil 2. Pupil coercion: need to ensure that
Participation Project can be asked for adults are not leading or forcing
their opinions and suggestions. pupils’ opinions.
3. Head Teacher is willing to use some 3. Incomplete mandatory training: need
designated ‘training days’ for Open to ensure that time borrowed from
House events so that all teachers can the designated training day does not
attend. result in staff failing to complete
statutory/mandatory training, leading
to local authority censure.

54. SWOT Matrix
Strengths – S Weaknesses – W
List Strengths List Weaknesses
Opportunities – O SO Strategies WO Strategies
Use strengths to take Overcoming
List Opportunities advantage of weaknesses by taking
opportunities advantage of
opportunities
Threats – T ST Strategies WT Strategies
Use strengths to avoid Minimize weaknesses
List Threats threats and avoid threats

55. 
Thank You….